Prism in tug-of-war

By Iain Scott, ITWeb group consulting editor

Johannesburg, 06 Mar 2006

The market is waiting to see whether Allied Technologies (Altech) will increase its offer price for Prism Holdings after Net1 Applied Technologies SA (Net1) matched Altech`s R686.94 million counterbid.

Prism announced after the market closed on Friday that Net1, which earlier said it would offer R1.02 per Prism share, had raised its price to match Altech`s R1.16 counterbid.

"We can`t comment on that at the moment," Altech director Peter Curle said this morning when asked what Altech`s next move would be.

"We only saw it late on Friday, and we will consider it," he said. When asked whether Altech`s board had yet met on the issue, he replied: "As I said, I cannot comment on that."

Net1, a subsidiary of Nasdaq-listed Net1 UEPS Technologies, said early last month when it sent Prism a notice of its firm intention to buy the group, that shareholders owning 43% of Prism`s shares had entered into irrevocable undertakings to support the offer.

Altech, part of the Altron Group, announced at the end of the month that it had also notified Prism of its firm intention to make an offer, with the price set at R1.16.

However, such undertakings are released in the event of a subsequent offer at a premium of at least 10% on the original price.

Although Net1`s new offer price matches that of Altech, it comes with a condition.

Net1 may withdraw its offer if a competing offer results in the withdrawal of written undertakings to support the Net1 bid, to the extent that shareholders with less than 40% of Prism`s shares remain bound by the undertakings.

Prism has also agreed to increase to R6.865 million the break fee it will pay to Net1 if a competing offer results in a change of control of Prism. Prism had originally agreed to a R6 million break fee.

The date for the completion of Net1`s preliminary due diligence investigation has been extended to 17 March.

The Prism share was trading at 113c on the JSE this morning, down 2c or 1.7% on Friday`s close. The Altech share was 174c or 3.36% lower than Friday`s close, trading at 5 000c this morning.

Net1 UEPS Technologies closed at $31.72 on the Nasdaq on Friday, down $0.28 or 0.88%.